Member Info for pauldrayton

Nice to see some interest here but no need for any ramping!

NT to buy or sell is not hugely uncommon with LBE.

If we take a glass half full approach and they can prove up the mid cases for EV & Oswig then:

EV = 36mmboe (5.4mmboe net to LBE) = $21.6m
Oswig = 26mmboe (5.2mmboe net to LBE) = $20.8m

High cases:
EV = 68mmboe (10.2mmboe net to LBE) = $40.8m
Oswig = 42mmboe (8.4mmboe net to LBE) = $33.6m

But both need another well to prove it, and there is risk involved too. So high potential but no guarantees with those two.

Kveikje is the only immediate monetisation option.

I think the difficulty in valuing the current discoveries is the wide range of potential recoverables, with the low cases for Oswig & Egyptian Vulture very much at the extreme low pre-drill expectations. So I suspect the market will currently value them both at zero, until appraisal wells are done which prove them as commercial.

Low case EV is now just 4mmboe (0.6mmboe net to LBE) which at $4/boe is $2.4m.

Low case Oswig is 10mmboe (2mmboe net to LBE) which at $4/boe is $8m.

Plus Kveikje at 3.5mmboe net to LBE which at $4/boe is $14m.

Total $24.4m.

You could argue for more than $4/boe as commodity prices have increased (especially for Kveikje because of the reservoir quality & proximity to infrastructure) but until Egyptian Vulture & Oswig are appraised I’m not sure they could monetise them and therefore the market will value at nothing for now.

They do have potential to add a lot more value and we need to hear about the company’s plans - it sounded like they think they will secure a southern extension to Oswig in Feb but that probably won’t get drilled until 2024 so it’s a long wait. I was hoping Egyptian Vulture appraisal news might have arrived by now - let’s hope Equinor are still keen to proceed with it.

Velocette still to come of course.

Undervalued still but what a clueless C(H)unt.

Kveikje alone should be worth at least £13m in a quick sale.

Whether they can do better than that with a deal we will have to see.

Parkmead maybe?

If you didn’t get a reply then I would Mozza. You will only get the stock response but at least it hammers home the point.

Given that the tribunal ruled on jurisdiction not once, but twice, it would seem that the Ad Hoc annulment committee have very little (or no) scope to rule differently even if they disagree (which I doubt they would anyway).

The text of the Art. 52/1/b of the ICSID Convention does not make any difference between jurisdictional matters and substance issues. So, to annul an Award based on excess of powers in jurisdictional terms, the excess of powers has to be manifest. Although there are some different views on that, if there is an uncertainty or doubt on whether or not the Tribunal has jurisdiction, that question should be settled by the Tribunal itself. If an interpretation is required to deciding on jurisdiction, it means that it is not manifest. Although the Committee does not agree on the finding and interpretation of the Tribunal, the Committee should refrain from to replace the Tribunal’s interpretation with its own. The decision as to whether a dispute falls within the jurisdiction of the Tribunal is subject to the interpretation of each individual Tribunal.

The ICSID Convention clearly contains a limited inquiry in jurisdictional matters of an Award and the Committees do not have the authority to examine a Tribunal’s jurisdictional decision on a de novo basis, as if they were appellate courts.

Annulment is an exceptional and narrowly circumscribed remedy. Ad hoc Committees are authorized to assess the legitimacy of the process, not the correctness of the Award. Annulment is prescribed as an extraordinary remedy for unusual and exceptional circumstances within the terms of the ICSID Convention.22 Ad hoc Committees are not courts of appeal, so they are not authorized to review the substantive correctness of the Awards, either in fact or in law. Moreover, Ad hoc Committees are not entitled to substitute the Tribunals’ determination on the merits for their own.
It is incumbent upon Ad hoc Committees to resist the temptation to rectify incorrect decisions or to annul unjust Awards. Annulment is not a remedy against an incorrect decision, so even the most evident error of facts in an Award is not itself a ground for annulment.

https://www.diva-portal.org/smash/get/diva2:1105600/FULLTEXT01.pdf

We can only hope their silence means they’re close to more deals, but only time will tell.

Response below - as expected really, nothing new:

Thank you for supporting Longboat as a shareholder and for contacting us. Your concern and questions are very relevant and understood.

Unfortunately, due to stock exchange rules, we can’t provide shareholders with updates on progress with the monetisation of Kveikje or potential acquisitions. As soon as we have material news we will announce via RNS.

We will also continue to run Investor Meet Presentations on a regular basis and will schedule the next one following any material developments given it has not been long since the last presentation.

In the meantime, we remain fully focussed on delivering on our strategy, growing the company and creating value to our shareholders.

The management and founders of the Company are all major shareholders having invested approximately £2m to date, and share and completely understand the frustration and disappointment felt by shareholders over the current share price. Rest assured we continue to work to deliver value both from the current portfolio and through other options.

Looking on the bright side, the CPR has Kveikje holding 35mmboe of 2C with an upside of 60mmboe 3C.

That’s 3.5mmboe 2C & 6mmboe 3C net to Longboat. At the start of the campaign Longboat were talking about an average transaction price of $4/boe in the ground but that was in the year before the deals were signed, when Brent had been averaging $50-60/bbl (excluding Covid years). It’s now $90+ so there may be a premium, and Kveikje has an excellent quality reservoir close to existing infrastructure so there should be a premium for that as well.

If they can achieve $6/boe for the 2C and $1.5/boe for the potential extra on top of that, that’s worth about 38p per share. It doesn’t get us our money back but it’s a start, and it ignores cash in hand plus any value for Egyptian Vulture & Oswig.

Now if the company can get creative with a deal for Kveikje then they ‘may’ even be able to extract more value than that.

I hope they pull their fingers out though because with a global recession incoming you never know what is going to happen to oil prices.

I kicked off so Ben Brewerton at FTI has promised me a response by the end of the week - doubt it will say much but will update here when he does.

Well I actually went back to them because they recommended taking part in the “upcoming Investor Meet presentations”. So I asked when they are planned for - no answer. It’s pretty p*ss poor to be honest given they’ve overseen a 77% drop in the share price since the IPO. I also hope they pull their fingers out now!

Can anybody link to a copy?

Not surprised about Sneller.

For those who intend to hold here it really is all about what they can do with Kveikje, and whether they can secure another deal of sorts. They’ve mentioned a couple of times recently that they’re looking elsewhere in the world and not just Norway so let’s hope they find something suitable.

Aside from potential deals they won’t be drilling again for 8 months or so (which is a bit of a relief in many ways!).

Well it’s worth people putting that in writing as well if people think it’s being run for the directors’ lifestyle rather than for shareholders.

Interested to know if you get a response Mozza.

My concern is that they might actually think their strategy is working. It’s baffling how they cite Mugnetind & Rodhette as successes. Even Egyptian Vulture & Oswig need more work before they hold any significant value. Out of 9 prospects drilled in 15 months, only 1 has immediate commercial value. That’s a pretty poor return however they may try to spin it.

The good thing is that it didn’t cost them a fortune, Kveikje does hold value, and they’ve still got some cash plus Velocette next year. If they can appraise Egyptian Vulture and Oswig (with the license extension in Feb), and just put all their efforts into securing some production now then all is not lost.

I think that’s the message the board need to get - technical successes and complicated results mean nothing to the market. They are valued at zero.

If they don’t start building the P side of the E&P then I don’t really see the point of the company to be honest - they’re just paying a load of salaries to hold minor parts in licenses they don’t have much influence over.

I suppose the question is: ‘if the award is annulled, did Rockhopper win the case?’.

Anyway I agree it’s a moot point at this stage. Sam has confirmed that they have a verbal agreement with the lawyers which they obviously can’t put in an RNS but there is no intention of paying the £3m unless/until they sell the award or the annulment proceedings get rejected.

Whilst it should have been mentioned before and it seemed a bit odd to mention it at this stage, it appears not to be an issue.

The important thing is that Rockhopper agree a funding structure for this next stage & their lawyers crack on with contesting the annulment application, whilst Navitas move forward with FEED & funding.

Everything else is just noise.